Billionaire to spend on sugar, rice and dairy production
Investment to help mitigate shortage of dollars for exports
Dangote Group, controlled by Africa’s richest man, Aliko Dangote, plans to invest $3.8 billion in sugar and rice and $800 million in dairy production in the next three years as the company seeks to expand and deal with a shortage of dollars needed to import raw materials.
The conglomerate plans to increase its production of sugar to 1.5 million metric tons a year by 2020 from 100,000 tons now and is seeking to add 1 million tons of rice, Edwin Devakumar, executive director at Dangote’s industries unit, said Tuesday in an interview in Lagos, Nigeria’s commercial hub. The company also plans to have 50,000 cattle producing 500 million liters of milk a year by 2019, he said.
A lack of foreign exchange means companies need to invest in local agriculture to help meet demand for food from Nigeria’s population of more than 180 million, Devakumar said. “All raw sugar has to be imported today, same thing for flour milling,” he said.
Dangote, whose cement unit is Nigeria’s biggest listed company, has been investing in agriculture as the country’s government seeks to diversify away from oil, which accounts for 90 percent of the nation’s export earnings and the bulk of revenue. The economy, which plunged into its first recession in a quarter-century last year amid falling crude prices, is forecast by the World Bank to expand by 1.2 percent this year.
Dangote plans to cultivate 350,000 hectares (864,850 acres) of land for sugar cane and add 200,000 hectares for rice, according to Devakumar. The company has ordered five plants for sugar milling and 10 for rice from Switzerland to be located in the north of the country, he said.